Could F1 be sold in September?

Once again it is time to talk about CVC Capital Partners sale of their interest in Formula 1. having been in the series for 10 years, it could be choosing to sell its interest as early as September with Goldman Sachs brokering the deal.

According to Bloomberg, the sale could have as many as three credible parties vying for the investment and this video suggest a broadcasting company could be amongst them. It certainly could happen and according to Kiel Porter, the impetus for this could be F1’s slow uptake on broadcast packages featuring data-rich content and multi-screen viewing experiences.

That all sounds great and it’s what the press have been crowing about as well as fans for some time. Let’s get a complete digital package and stream that online and get the content ripped and put on YouTube and I want to watch a race with three screens so I can tweet, see raw car data, the camera over Lewis Hamilton’s shoulder and somehow manage to listen to Leigh Diffey and team call the action while I scan the radio channels trying to hear Kimi’s latest tirade. Meanwhile, I missed 30 of the 70 laps trying to muck around with my devices and tweet witty things on Twitter and Facebook. No thanks.

I am certainly willing to admit that a broadcaster could be interested but I suspect an investment company who realizes that CVC will have made 8 times return on investment, assuming they sell for $10bn, will be very keen to pony up and secure the interest that CVC holds. If F1’s returns can continue in this manner, a revolving group of investors could carry on this way for some time. Get in, skim the profits for 5 years and then get out.

No wonder the teams were lobbying hard for the F1 Strategy Group because if you fear the sport is simply going to be shuffled around between venture capital companies, then you need some assurance the series is stable and heading int eh right way irrespective of who owns it. I would feel no different than Mercedes, Red Bull, Ferrari and Renault if I were in their position.

This isn’t the first time F1’s been in the shop window but Kiel says this time seems more realistic than the past efforts. We’ll have to take his word for it but I haven’t seen the F1 journalists quite as effusive in their assurance that a September date is eminent and they rarely have their finger off of the pulse of F1. Time will tell, I have no inside track to CVC’s position so anything I would suggest would be mere guesswork.

F1 doesn’t need to become the wild west of digital media strategies and a test-bed for content delivery via Snapchat or other goofy social media trends. If you have a multibillion dollar business, you don’t take risks like that with your content which is the single-most valuable asset you have. Whatever F1 does do with its broadcast package, it will be Machiavellian in it’s approach and control of that package. It should be, that’s its $10bn asset and it’s not about to simply throw its content out to the world in search of a bigger audience. It doesn’t need to, not when owners are making 8x’s the ROI.

Hat Tip: Bloomberg

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I’d have to imagine it’s worth far, far less than $10 billion or even half that. A large measure of CVC’s dividend payouts to its investors came from debt offerings on F1, which have yet to be recouped. The broadcast strategy is kaput, and it’ll take a huge investment to reorient to the digital age (at least to livestream) and it’s a serious gamble what the impacts will be, or whether that’d be a successful investment. You have to be willing to lose A LOT of money on the transition. Ain’t gonna be no 8x returns to the next buyer.… Read more »